As companies grow, many will realise that they need access to external expertise and experience to take them to the next stage of development.

Whilst some will employ consultants to look at specific issues within the business, others will look to supplementing their internal expertise with non-executive directors (NEDs) who can provide direct guidance and advice to support the firm onto the next stage of development.

So who are these individuals who come in to support a business and what do they do? Simply put, NEDs devote part of their time to the affairs of the company as an independent adviser or supervisor whilst sitting on the board.

In doing so they provide practical and creative guidance to the companies and have helpful views on securing the best use of boardroom time to ensure that sufficient consideration is given through the year to strategic and innovative matters.

They are also concerned with maintaining and developing a strong executive structure and will be involved, often with the management team, in the creation of a robust strategy and the plans needed for its fulfilment.

More importantly, they give objective advice to the board on the company’s performance and guidance on the principles of corporate legislation and bring outside experience relating to contacts with key stakeholders such as financial sources, customers and suppliers.

They are therefore involved not only in independently reviewing the firm’s management structure but also in objectively assessing the company’s overall performance and providing outside experience of the workings of other companies and industries.

As a result, NEDs bring a number of advantages to those businesses that are wanting to grow their operations.

First of all, as an outsider, they can support the strategic direction of the company as they may have a clearer or wider view of external factors affecting the company and its business environment than the executive directors.

However, they also have a critical internal role in looking at the plans and performance of the executive team, especially with regard to the progress made towards achieving the company’s strategy and objectives.

There is also the issue of supporting communication as a board’s effectiveness can benefit from outside contacts and opinions.

In fact, an increasingly important function for non-executive directors can be to help connect the business and board with networks of potentially useful people and organisations. In some cases, the non-executive director will be called upon to represent the company externally.

But the most critical role of a non-executive director is to provide such an ‘external dimension’ to organisational thinking.

In fact, being independent of the management means that the NED doesn’t need to be at all defensive about any problems within the company and can provide an honest opinion about where things are going wrong (or right).

This can then often lead to a greater ability and readiness to look at fresh ideas, approaches, and contacts, all of which will help the business to grow further.

Despite these advantages, non-executive directors seem to be mainly based in larger firms, usually because such individuals are not inexpensive to employ.

For example, research has suggested that less than a fifth of companies employ a NED and it was only when the business grew to a medium-sized company that this was considered a possibility by founders.

Of course, such individuals will not be cheap but given that the role of a non-executive director is to augment the knowledge, skills, and experience of the full-time management team, small firms may wish to seriously consider whether such a price is worth paying if they can realise their full potential by accessing the skills, experience and networks that such individuals can bring to the business as it grows.